Too Little, Too Late

Dear Clients, Colleagues, and Friends,

Marshall loves funny t-shirts. His life’s motto is “anything for a laugh… especially if it’s wearable.”

Unfortunately, after a state agency raided his business over a disgruntled, ex-employee’s labor violation claims, Marshall doesn’t feel like laughing. He feels like this ex-employee — who was fired for good cause — is out to get him… and he may be right.

Marshall’s story mirrors many other successful small business ventures. Designing and selling t-shirts of his own design in college, what was once a fun weekend hobby soon burgeoned into a modest t-shirt screening business serving all of Orange County. He just celebrated his 21st year in business by landing a lucrative contract with a local school system that will pay his commercial rent for the next two years.

While business is good, Marshall never considered it “that good,” so last year, when a friend referred him to my law firm for estate and asset protection planning, Marshall took one look at our website and decided he wasn’t a big enough fish in the pond to warrant our services. “I thought you’d be too expensive,” he later explained.

So he did nothing

A year later, with Marshall’s business being raided by authorities confiscating his computers and treating him like a criminal, Marshall’s CPA called me, asking if I could do anything to help protect his hard-earned business and personal assets prior to his upcoming legal battle. After all, Marshall struggled for years to create a successful business; it would be devastating if the little financial security he created could be completely wiped out fighting bogus claims.

Hindsight is 20/20

This is unfortunately a case of too little, too late. Normally, “firewall planning,” or asset protection planning, can be done before any legal claims arise with no problem. Such planning can protect a person’s or business’ assets from unforeseen lawsuits and legal entanglements. Unfortunately, fraudulent transfer laws preclude such planning after the worst case scenario actually happens.

In this case, Marshall sat too long on the sidelines; he didn’t take action when he could have; his chance to have me create a firewall to protect him had passed. Regrettably, he will be forced to sell off assets just to fight this legal action — bogus or not — let alone pay any possible fines if he decides to settle. Today, Marshall would gladly pay a “big fish” fee to implement a comprehensive estate and asset protection plan now that he knows the potential dire consequences of not doing so.

First class estate and asset protection planning services are not cheap, but ponder this: most successful people drive cars that are more expensive than what it costs to protect their entire estate for their whole life. Even better, Uncle Sam can help subsidize the cost through the utilization of the tax code. Considering this, coupled with the potential risks of losing it all, an upfront investment in such estate and asset protection planning seems like a bargain.

Take this moment to consider your own situation. Are your assets “firewalled” against unforeseen liabilities? Or, like Marshall, have you been penny wise and pound foolish?

If your assets are exposed, even if you think you are not a “big fish,” call us for a consultation to discuss “firewalling” your estate with a comprehensive asset protection plan. Your split-second decision to call us today may save you extensive financial heartache tomorrow.

Posted in Client Alert.